On October 17, 2016, the Government of Alberta (“Alberta”) and the Alberta Medical Association (“AMA”) announced that AMA members had ratified amendments to the existing Master Agreement between the parties. The Master Agreement was not set to expire until 2018, but the current downturn in Alberta revenues made it unsustainable without modification.

There are four important aspects of the amendments.

First, and foremost, the rate of increase in funding for the AMA budget will be reduced. This reduction will be achieved through use of a funding calculation that encourages physicians to be cost-conscious. If the actual amount of spending on doctors’ fees through the AMA budget is less than the budget calculated in accordance with the amendments, then doctors will receive additional benefits, including potential positive fee adjustments. If the amount of spending exceeds the budget, then additional benefits will not be payable, and there may be other negative consequences for doctors’ income.

Second, Alberta and the AMA have agreed to address the need for a new provincial framework for Primary Care Networks (“PCNs”). Recently, Alberta clawed back approximately $65 million from PCNs. This money was considered surplus over and above the needs of PCNs. The amendments will facilitate the introduction of new information technology and greater data-sharing amongst different parts of the health system in Alberta, including PCNs.

Third, new physician peer review and accountability mechanisms have been accepted by the AMA and Alberta. These mechanisms are separate and apart from the function of the College of Physicians and Surgeons of Alberta as the professional regulator.

Fourth, some physicians will see significant changes in income. Academic-based physicians and some primary care physicians will move to a system of compensation based upon the time they are serving the public rather than on the number of services provided. On the other hand, some physicians who have become very efficient at the delivery of health services will have their income reduced due to the perception that it has grown too high. Radiologists and ophthalmologists are amongst the specialists in the crosshairs for negative fee adjustments.

The Master Agreement has not been extended by the amendments. Therefore, the AMA and Alberta will immediately begin negotiations with respect to a new Master Agreement to commence in 2018.